Malaysia-Indonesia Halal Trade Cooperation Expected To Push Bilateral Trade Above US$29 Billion In 2026

KUALA LUMPUR, JULY 2026 – Malaysia and Indonesia’s bilateral trade is expected to grow by 10% to US$29.3 billion in 2026, driven by stronger cooperation in the halal sector and broader market access between the two neighbouring economies. Malaysia’s Chargé d’Affaires in Indonesia, Farzamie Sarkawi, said the projection reflects deeper bilateral ties in trade, investment and human capital development over the past three years.

The growth outlook is closely linked to the halal Memorandum of Cooperation signed by both countries in 2023. The agreement has opened wider opportunities for Malaysia and Indonesia to strengthen collaboration across multiple sectors, including trade facilitation, investment, expertise exchange and training initiatives.

Farzamie said the cooperation has already produced positive results, especially through mutual recognition of halal certification between Malaysia and Indonesia. This has helped ease the movement of halal products and improved market access for businesses in both countries.

Malaysia-Indonesia trade reached US$26.61 billion in 2025, marking a 5.3% increase from the previous year. The strong performance provides a solid foundation for further growth in 2026, particularly as both countries continue expanding halal-related trade and investment channels.

The processed food segment remained one of the key contributors to halal-related trade. Malaysia’s exports of processed food to Indonesia rose 18.5% year-on-year to US$640 million in 2025, supported by products such as cocoa powder, non-dairy creamer, filled milk, chocolate products and flavouring preparations.

At the same time, Malaysia’s imports of processed food from Indonesia increased 10.8% to US$840 million in 2025. The growth was driven by products including coconut milk, cocoa paste, instant noodles and rice vermicelli, showing strong two-way demand in the halal food supply chain.

Indonesia also remains an important supplier of halal-related raw materials and ingredients to Malaysia. Imports of palm oil-based products from Indonesia reached US$2.34 billion, while imports of palm oil and agricultural products based on palm oil amounted to US$1.14 billion, supporting Malaysia’s halal food processing, ingredients, cosmetics and personal care industries.

Malaysia is also looking to expand halal cooperation beyond bilateral trade through wider engagement with members of the Developing Eight Organisation for Economic Cooperation, or D-8. Farzamie said Malaysia’s participation in the five-day D-8 Halal Expo Indonesia was led by MATRADE and Tourism Malaysia to connect the country’s halal capabilities with opportunities across the D-8 market.

The D-8 halal platform is expected to strengthen cooperation in halal trade, investment, business networking and regional halal value chain development. Intra-D-8 trade currently stands at about US$150 billion to US$160 billion annually, with the bloc targeting US$500 billion by 2030 through deeper economic cooperation and stronger halal industry integration.